spyguy Posted August 1, 2017 Share Posted August 1, 2017 As part of Basel3 and probably enhanced BoE monitoring, all high LTI mortgages will be closely monitored. Id guess any payment defaults will be reported straight to the BoE. Quote Link to comment Share on other sites More sharing options...
lombardo Posted August 1, 2017 Author Share Posted August 1, 2017 12 hours ago, Bland Unsight said: I'd make the point that Lombardo is repeatedly telling (not asking) and what he's telling anyone who inclined to listen is that there is an army of naive young people who'll start buying house prices at the first sign of drops because they are habituated to high prices. Where did I say that? Quote Link to comment Share on other sites More sharing options...
maverick73 Posted August 1, 2017 Share Posted August 1, 2017 (edited) 1980 Average Salary: £6,000 Average House Price: £22,676 2017 Average Salary: £19,000 Average House Price: £232,530 So house prices have gone up by 1025% yet wages have only risen by 317%? For a final figure, to have the same level of income as the average person in 1980 you would need to earn... £61,526.72! Edited August 1, 2017 by maverick73 Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted August 1, 2017 Share Posted August 1, 2017 1 hour ago, lombardo said: Where did I say that? You state it explicitly in the second verse, somewhere in between ideas about things being frightening ("a little bit") and how people moved with "expert timing". Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted August 1, 2017 Share Posted August 1, 2017 On 29/07/2017 at 10:15 PM, lombardo said: I believe that we now have a new paradigm. Young people have not seen reasonable prices and to them a 40% drop would be seen as a bargain. They live in flat shares and generally believe that house prices wont crash. I know the latter because most of my firends are in their 20s. That is why I think we need to include the recent ridiculous prices into the equation. Also this bit (I think I should have gone with this as the answer and not the stuff about kung-fu fighting - totes soz, fo' shizzle.) Quote Link to comment Share on other sites More sharing options...
mrtickle Posted August 1, 2017 Share Posted August 1, 2017 (edited) Not to mention the premise of the thread title "...why should 4.5 time earnings still be considered the target?" The ABSOLUTE MAXIMUM that should be safe/sensible (for economic stability and all the other reasons) to borrow isn't a "target". It's a MAXIMUM which should be RARE, not the norm. It's described as a "target" as if this is correct yet it forms the false premise of the "should it be another number" (unwritten: "should it be HIGHER") question. Edited August 1, 2017 by mrtickle Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted August 1, 2017 Share Posted August 1, 2017 I've never inadvertently driven at a speed exceeding the speed limit, but I had an acquaintance who did (IIRC his name was Lumbago, or Bombardiero - something like that) and he told me that the numbers on the signs are "limits not targets". Also he looked a bit like this... Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted August 1, 2017 Share Posted August 1, 2017 In other news, I'm calling this one, and I agree with Si1 Quote Link to comment Share on other sites More sharing options...
lombardo Posted August 2, 2017 Author Share Posted August 2, 2017 1 hour ago, Bland Unsight said: Also this bit (I think I should have gone with this as the answer and not the stuff about kung-fu fighting - totes soz, fo' shizzle.) I think you missed this bit where I show that I am not certain. I am considering different possibilities. Quote And that was exactly my point. The new generation will unfortunately accept outrageous prices. Among my family and firends, I am the only one who thinks that a big crash will happen. I have to be silent about it because they think I am being stupid. Others get upset when I speak becasue they fear negative equity. However my speculation could be wrong and maybe when houses do get to 7x in London then there will be appetitie/fear for lower prices and they may go to 3-4x like they were at points in the past. Lombardo is named after: https://en.wikipedia.org/wiki/Attilio_Lombardo 1 hour ago, Bland Unsight said: In other news, I'm calling this one, and I agree with Si1 You think I am a troll? Do you live in London? I wouldn't mind meeting you to prove that I am not one. Quote Link to comment Share on other sites More sharing options...
lombardo Posted August 2, 2017 Author Share Posted August 2, 2017 1 hour ago, Bland Unsight said: and he told me that the numbers on the signs are "limits not targets". BTW I already clarified earlier that I was speaking about the ratio of house prices to earnings, not mortgages to earnings. It was my mistake to quote the BOE article and make people assume that I was talking about their recommendations/limits. Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted August 2, 2017 Share Posted August 2, 2017 29 minutes ago, lombardo said: You think I am a troll? Do you live in London? I wouldn't mind meeting you to prove that I am not one. When we meet, how exactly do you propose to prove to that you are not a troll. Will you pull out a UV lamp and not turn to stone? Sorry, pal. This is a total waste of everyone's time. Either you are a troll or you might as well be. [Adjusts settings] Quote Link to comment Share on other sites More sharing options...
lombardo Posted August 2, 2017 Author Share Posted August 2, 2017 28 minutes ago, Bland Unsight said: When we meet, how exactly do you propose to prove to that you are not a troll. Will you pull out a UV lamp and not turn to stone? Sorry, pal. This is a total waste of everyone's time. Either you are a troll or you might as well be. [Adjusts settings] Human interaction is different in person and you can be more convincing and likeable. In person you may see that I am not such a bad guy. I plan to stay on this forum for a long time and I don't want to be labelled a troll. I think some of you have become ultra defensive after all these years. TBH most on here didn't call me a troll and gave me some good answers, so that is good on them. For me it's not a waste of time because I am fascinated with human psychology and rationality. I am the sort of person that would pay money to meet a real Internet troll so that it helps me understand their mind. I am not a troll but I am certainly an unusual person. I find it quite fascinating that you would think I am a troll just because I suggested that a 2nd income and the new attitudes of the youth may limit or slow down the crash. I also admitted that I could be wrong but you still think I am a troll just for speculating and having slightly contrarian views. Quote how exactly do you propose to prove to that you are not a troll. A person is innocent until proven guilty. But as I said, I would have at least tried. Quote Link to comment Share on other sites More sharing options...
Kosmin Posted August 2, 2017 Share Posted August 2, 2017 12 hours ago, lombardo said: BTW I already clarified earlier that I was speaking about the ratio of house prices to earnings, not mortgages to earnings. It was my mistake to quote the BOE article and make people assume that I was talking about their recommendations/limits. There was a time when 3 times a single income plus a moderate deposit would buy a house and a lot of people did so. A few are still able to buy due to their high incomes, but more seem to rely on high deposits. Where did all this cash come from and where will it go? How many forced sellers will there be, and how those who aren't forced to sell respond to price falls? You can do more research into how many will be forced sellers, but I don't think we can know the expectations of other market participants, so the resulting market dynamics won't be very predictable. Quote Link to comment Share on other sites More sharing options...
hi5lo5 Posted August 2, 2017 Share Posted August 2, 2017 (edited) This is what I found in the prospectus of one of the RMBS bonds issued by Lloyd's bank. So the bank and the investors of these RMBS have different measures. The average income used in these are considerably high. I am puzzled on how they arrived at this massive figures for average earnings? Is it average couple earnings. Edited August 2, 2017 by hi5lo5 Quote Link to comment Share on other sites More sharing options...
Kosmin Posted August 2, 2017 Share Posted August 2, 2017 1 hour ago, hi5lo5 said: This is what I found in the prospectus of one of the RMBS bonds issued by Lloyd's bank. So the bank and the investors of these RMBS have different measures. The average income used in these are considerably high. I am puzzled on how they arrived at this massive figures for average earnings? Is it average couple earnings. It says "average income of borrowers though." This will be higher than average earnings as most low earners don't have a mortgage. Quote Link to comment Share on other sites More sharing options...
hi5lo5 Posted August 2, 2017 Share Posted August 2, 2017 9 minutes ago, Kosmin said: It says "average income of borrowers though." This will be higher than average earnings as most low earners don't have a mortgage. I doubt that, ONS is the source.Does ONS publish average income of borrowers? Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted August 2, 2017 Share Posted August 2, 2017 1 hour ago, hi5lo5 said: I doubt that, ONS is the source.Does ONS publish average income of borrowers? Might be of interest: Published 2014 http://visual.ons.gov.uk/backup/wp-content/uploads/sites/3/2015/03/077dcp171766_386375fs3.pdf Published 2016 https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/housingsummarymeasuresanalysis/2015 Quote Link to comment Share on other sites More sharing options...
Kosmin Posted August 2, 2017 Share Posted August 2, 2017 2 hours ago, hi5lo5 said: I doubt that, ONS is the source.Does ONS publish average income of borrowers? I quoted from the table you pasted! Do ONS incorrectly describe the data they publish? Quote Link to comment Share on other sites More sharing options...
spyguy Posted August 2, 2017 Share Posted August 2, 2017 4 hours ago, hi5lo5 said: This is what I found in the prospectus of one of the RMBS bonds issued by Lloyd's bank. So the bank and the investors of these RMBS have different measures. The average income used in these are considerably high. I am puzzled on how they arrived at this massive figures for average earnings? Is it average couple earnings. Well, average income in YandH is about 26k. Assuming they mean earnings rather than hoysehold income. Earnings pretty much follow the mean distribution. 60% of workers earn mean or below. That would point to only the top 5% of earners engaging with the housing market. That does not bode well for selling a house. Quote Link to comment Share on other sites More sharing options...
thewig Posted August 2, 2017 Share Posted August 2, 2017 22 hours ago, maverick73 said: 1980 Average Salary: £6,000 Average House Price: £22,676 2017 Average Salary: £19,000 Average House Price: £232,530 So house prices have gone up by 1025% yet wages have only risen by 317%? For a final figure, to have the same level of income as the average person in 1980 you would need to earn... £61,526.72! I earn that and don't feel well off at all, the whole gross salary number is a complete and utter scam. I'd be better off working sixteen hours a week and claiming tax credits etc. I'm not complaining per se, just an observation that I've realised moving up the salary scale is fools gold Quote Link to comment Share on other sites More sharing options...
hi5lo5 Posted August 2, 2017 Share Posted August 2, 2017 12 minutes ago, spyguy said: Well, average income in YandH is about 26k. Assuming they mean earnings rather than hoysehold income. Earnings pretty much follow the mean distribution. 60% of workers earn mean or below. That would point to only the top 5% of earners engaging with the housing market. That does not bode well for selling a house. I will keep a close eye on the delinquency and repurchases for these RMBS. I believe a simple 0.25% increase tomorrow shall be enough to trigger it. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted August 3, 2017 Share Posted August 3, 2017 On Tuesday, August 01, 2017 at 10:36 PM, maverick73 said: 1980 Average Salary: £6,000 Average House Price: £22,676 2017 Average Salary: £19,000 Average House Price: £232,530 So house prices have gone up by 1025% yet wages have only risen by 317%? For a final figure, to have the same level of income as the average person in 1980 you would need to earn... £61,526.72! Says a lot about unmortgaged houses being swapped and inheritance. Nobody actually buys houses anymore they are paid for with printed equity. Equity we couldn't possibly tax especially Aunt Edna's million, it belongs to her nephew who fancies a BTL empire. Quote Link to comment Share on other sites More sharing options...
Kosmin Posted August 3, 2017 Share Posted August 3, 2017 On 29/07/2017 at 2:28 PM, lombardo said: Now that women earn along with men (unlike some decades ago), why do we still use 4.5 time earnings to define what a house should cost? If women on average earn 60% of men's earnings then the new target should be (4.5*0.6)+4.5 = 7.2 Where did this 60% figure come from, or was it just supposed to be illustrative? Quote Link to comment Share on other sites More sharing options...
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